Examining the Jurisdictional Divide in Canadian Labour Relations
Introduction
When Torontonians woke up to find their driveways filled with previous week’s garbage, they started to pay attention to the ongoing negotiations between the City of Toronto and CUPE 416, the union representing the city’s garbage collection workers. The 2009 strike ended up causing damage and unpleasant smells and ill will between the public and the unions. Ultimately, the threat of adverse municipal action backed the workers into a proverbial corner. The garbage men went back to work after 31 days and a struck deal.
However, this issue was limited to Toronto, and was municipal in nature and subject to provincial rules. What is the proper course of action in the case of the current 2018 Canada Post strike? The Crown corporation handles a far larger volume of business and operates across provincial borders. Workers rights are, however, a provincial matter. Which legislative body should oversee the Canada Post strike? How should Canada organize in managing the ongoing collective bargaining, while each province’s rules are different?
The main question guiding this study is the following: “How necessary and how effective is the interference of the Federal government in labour issues which are meant to be solved at the Provincial level? If an issue can’t be managed provincially, is a constitutional change warranted to account for businesses which operate federally?”
Does legislating employees back to work via anti-strike policy actually solve
One of the most complicated legal dilemmas facing Canadian employers is understanding whether their workplace is regulated by federal or provincial workplace rules. The issue of jurisdiction over labour laws stems from Canada’s division of power between its varying levels of government. While the Constitution Act of 1867 offers a helpful list of federal and provincial powers, when it comes to labour laws, the landscape is not as clearly divided as it should be. This study explores the reasons why this is the case and offers some solutions aimed at the Canadian policy maker.
Specifically, the purpose of this research study is to discuss how and to what extent different entities influence labour policy development in Canada. The following pages will examine the roles of federal and provincial governments as well as unions. A particular focus will be on the issue of jurisdiction of labour laws and the power of bargaining in Canada.
Though 37 percent of Canadian workers are unionized, and 42 percent are covered by collective bargaining (Adams, 1994), Canada has recently experienced a significant destabilization of the traditional governing mechanisms in the domain of labour relations, particularly with regards to the processes of collective bargaining, and specifically dispute resolution strategies. Furthermore, there is also the issue of fragmented constitutional responsibility i.e. the jurisdictional overlaps between the federal governmental and provincial laws. As it will be argued, the complexity of complying with so many different laws has been an issue in Canada for decades.
Compared to international standards, Canada loses a large number of workdays due to strikes. The issue of strikes is also connected to the problem of low productivity, which has plagued Canada since its inception (Stevenson 2009). Despite the right to strike legislation, however, strikes by public employees may cause intense disruption in community life. When transit system cease to operate or when educational institutions close, the issue spills over onto the rest of the society. In such a dire situation, provincial governments tend to occasionally respond to strikes by public workers with an order to return to work. The controversy arises when the Canadian government forces employees to stop striking by issuing the coercive measure known as the “back-to-work” order. This is usually achieved by making the striking employees accept the most recent offer from the government. Some examples are partial wage increases or fulfillment of incomplete demands, like the unsatisfactory reduction in shifts. Although observers such as Lady Barbara Wootton, claim that labour unions in the public sector are “self-serving, sectional forces whose objects is to improve the lot of its members at the expense of the general public” (Walker, 1980), empirical evidence points to the effectiveness of forceful legislation as a short to medium term solution to labour issues. Such incomplete agreements do not negate ill-feelings between the parties, nor do they ensure that grievances won’t arise in the future.
For example, though an essential services designation or “back-to-work” order meant to reduce the effect of a strike in the public sector, it might also reduce the incentive of employers and employees to settle. Therefore, it is argued that despite the current fragmented constitutional responsibility for labour relations in Canada, which presents difficulty for public workers due to the complexity of complying with so many different laws, the sole involvement of the federal government in labour relations does not serve a particular purpose. This study argues that a co-operative approach between the federal and provincial governments is the best method of leading labour relations due to its underlined efficiency.
Thesis: This study argues that the federal policymakers need to it is up to policymakers, i.e. the provincial and federal governments to determine whether the unintended and long-term consequences of anti-strike legislation methods of forced back to work agreements are worth the benefits they seek. Specifically, it should be the role of the management structures should make realistic plans with regard to their issues. In this study, arguments are provided against all forms of processes of control, no matter which party (government or union management) fosters them. In the long run, the balanced and co-operative approach is the best way of maintaining relationships between parties..
Background Information: Federalism and Unions
According to Stevenson (2009), the notion of federalism, although ambiguous and complex, elusive and full of tensions, implies a form of government in which two or more states or provinces constitute a political unity, while each retains the management of its internal affairs (p. 3). It should be noted, however, that every federal state must serve a purpose. For example, within federalism, each state or province would want strong central government in order to achieve robust mercantile or financial outcomes (Stevenson 2009, p. 6). In this context, it is emphasized institutional or legal criteria: there are two levels of government, each independent of the other, and the written constitution specify the duties of each level (Stevenson 2009, p. 7).The essence of federalism is, hence, in maintaining two distinct levels of government, rather than having national government only (Stevenson 2009, p. 14).
Some theoreticians wonder whether federalism implies a weak government, since the central government has to respond the regional governments. Other commentators correctly ask why provinces instead of the state should have jurisdiction in labour relations. Some would argue that having involved not just federal but also provincial governments over labour laws makes a stronger effect on the labour relations outcomes, including strikes i.e. labour disruptions. It is more effective and efficient having provinces to regulate labour laws and work disruptions, as they believe. Likewise, because of the power of federalism, as it is the case in Canada, the USA and Australia, which lag behind European states in their provisions to social welfare, income security, public ownership and the control of economy, these federal states are more efficient in terms of capitalist economy (Stevenson 2009, p.16). Canadian federalism, therefore, combines the economic advantages of its large size with the possibilities for self-governing on the provincial level (Stevenson 2009, p. 17).
In the work The Challenge of Restructuring: North American Labour Movements Respond , editors Jenson, J., Mahon, R. (1993), write that the concept of unions is used to describe strategic collective actors which are seeking to realize their goals imposed by their external environment, such as governments and global economic restructuring (p. 20). The history of Canadian unionism starts in the times of Great Depression and during the World War II, when Canadian unions demanded collective-bargaining rights. Over time, the Canadian unionism became powerful Canadian labour movement that successfully mobilized new members (Jason & Mahon 1993, p. 32).
In the 1980s, while Canadian provinces used frequently back- to -work legislation, some provincial governments have been enacting legislation to weaken the rights of trade unions to organize and bargain (Heron & Storey 1986, p. 25). Simultaneously, the Canadian state has been aggressively promoting new forms of bargaining between workers and their bosses by bypassing the collective bargaining process and encouraging non-confrontational negotiations of problems (Heron and Storey 1986, p. 25). Eventually the new National Labour Market and Productivity Centre will be established (1984). Evidently, the aim of the Canadian government was to boost Canadian capitalist system by restricting or suspending workers to bargain collectively over the terms of their employment. It was the time of global economic crisis, and this arrangement worked well (Heron and Storey 1986, p. 25)
Examining Public Sector Labour Relations in Canada
The concept of labour relations in the public sector is used to describe “processes and activities that unions and the government develop and use to clarify, manage, reduce and resolve conflicts between employers and unions’ representatives while accommodating various goals of each” (Sack & Lee 1989, p. 199). The practice of labour relations is governed by contracts negotiated by both parties. It is important to note that unionization introduces democracy in the employment relationship. As it is argued, laws limit certain types of behavior, making sure that they do not exceed what the public will tolerate. In such a context, labour relations depict a complex, often hidden, thread of relations, desires and goals between key players: the state and management structures/union representatives (and third party neutrals, if needed).
On the other hand, there is the problem of the state’s autonomy: its actions may be limited of by the set of economic forces. In addition, the state, as it is case with the federal organization in Canada, is fragmented with its federal-provincial divisions. From the labour union perspective, collective bargaining develops the new social and economic tools in order to achieve betters wages, and to improve working conditions. Meanwhile, it should not be forgotten the impact of public opinion and media on the future of labour disputes.
Canada has a history of complex strategies in managing its labour policies. One of the most successful ways in which it has managed a healthy workforce date back almost thirty years. In 1989 it has paved the way for job training as a method of workforce management. Specifically, a “labour force development strategy” organized by the Government of Canada aimed to create and maintain a “highly trained and flexible workforce” (Adams, 1994). The savings from changes in the Unemployment Insurance act would be used to run training programs to ensure that the workforce would be flexible and adaptable to the needs of the economy. This strategy was so successful, because it managed to mitigate several key concerns; 1) the existence of a passive income culture as well as 2) the need to adapt to a more technologically advanced economy.
How Effective is Back-to-Work Legislation in Canada?
George Adams, one of Canada’s experts at dispute resolutions, gave a presentation on the US – Mexico – Canada trade relations in 1994, which became well known for its definition of labour laws. In his arguments, both the federal and provincial government have the power to create labour laws. He refers to this situation as the “fragmented constitutional responsibility” and points to the divisive dynamic of Canadian provinces and territories. In his view, this is not the most ideal way of maintaining good labour relations, though it provides a platform for experimentation and a way to develop further change for the better in the future. The most obvious benefit of Canada’s fragmented labour law landscape is that the chances of having poorly enacted laws cover the entire country (Adams 1994) are basically eliminated.
At the crux of Adams’ argument in favour of Canada’s disjointed labour policy is the idea of creative destruction and the ongoing process of adjustment. Specifically, he claims that collective bargaining is a way towards “industrial democracy” (Adams 1994), as it continuously adjusts conditions of employment and allows bargaining power to the worker. The market-based approach towards collective bargaining will ultimately be beneficial towards the employee, ultimately resulting in markets, which are more dynamic, and a preservation of individual freedoms.
Labour Legislation, a Constitutional Matter?
From a constitutional perspective, this study has maintained that Canadian provinces have the jurisdiction over labour legislation for both public and private sector collective bargaining. Furthermore, there is also an exclusive set of distinct federal labour laws involving interprovincial industries. Such examples of precedents are a result of recent changes to public-sector labour legislation. This legislation ensures that the aforementioned “industrial democracy” does not completely halt services, which are considered essential.
When it comes to such situations, there are two main dispute resolution strategies within the larger framework of collective bargaining within the labour relations environment: compulsory arbitration (conventional arbitration; final-offer selection) when workers are not allowed to strike and unresolved disputes must be settled through final and binding arbitration; essential services designation when workers are allowed to strike but some portion of workers is legally obligated to continue providing designated services. For example, the provincial government has decided to rule out the right to strike for paramedics in Alberta.
Similarly, New Brunswick passed legislation-restricting strikes in nursing homes. Likewise, both the cities of Ottawa and Toronto have considered requesting that higher levels of governments place restrictions on public transit workers’ right to strike (Hebdon & Dachis 2010). In the Canadian public labour environment, three forms of public sector dispute resolution have been identified: 1) the approach that involves cooperation; 2) adversarial bargaining; or 3) an imposed solution through legislation (Swimmer 2001, in Hebdon & Dachis 2010). For example, the Ontario legislature, if governments forbid workers from going on strike and if a settlement cannot be freely reached between negotiating parties, often requires the parties to settle disputes through a process of compulsory arbitration that is expected to reduce strike length and strike incidence by assisting both sides to reach an agreement. Therefore, “cooling-off periods is expected to reduce the incidence of strikes by creating a period between the time mandatory third-party conciliation ends and strikes can legally begin. Parties might be able to reach an agreement during this time, reducing the number of strikes”. However, the danger is that the policy that reduces the threat of a strike, by issuing compulsory arbitration also might reduce the bargaining power of unions (Hebdon & Dachis, 2010). According to Hebton and Dachis (2010), strong evidence was found that compulsory arbitration has both chilling and dependence effects on the bargaining process.
Examining the Effectiveness of Public Worker Strike Bans
According to Robert Hebdon and Robert Stern (2003), no strike –laws in reducing industrial conflict is a central policy objective of most state collective bargaining laws. As they believe, the state officials should recognize the legislation on the ban of the right to strike because it “reduces the probability of reaching future agreements through the regular bargaining processes and increases the likelihood that they will have to rely on this thorny, intrusive instrument again in the future” (Hebdon & Stern 2003, p. 502).
While discussing the fact that Canada is among the countries that have the highest number of strikes in developed nations, they ask: “What might account for this phenomenon?” They claim that “one possible factor is the passing of labour legislation that makes it more difficult to strike while unintentionally encouraging it (“Hebdon and Stern, 2003). Generally speaking, they believe that “back-to-work” legislation may be appealing as a way to resume public services, but its long-term consequences could be negative.
On the other hand, the role of management should be reconsidered. From the so-called pluralist perspective, they should lean less towards enforcing of their employees to continue strike, and prefer more persuasion and co-ordination with the government structures. In the situation when public is depraved from the essential services, management of unions ought to channel their frustrations towards evolution and positive change. After all, maybe the circumstances are not as adverse as they seem, they ought to make realistic plans and move forward with an informed sense of optimism.
Case Study: The Province of Ontario and the 2009 Garbage Collection Strike
Carlo Fanelli (2016) comments on the evolution of municipal laws and public services in the city of Toronto since the end of the Second World War. He claims that the defining characteristic of the change in provincial labour relations has been a transition from Keynesian views towards a strong neoliberal viewpoint, which is something that is also evident in provincial project financing as well as intergovernmental projects. The change has been exacerbated since the worldwide recession, which occurred ten years ago. Toronto, as the capital of all Canadian industry, is in particular a great example of significant municipal restructuring. Therefore, case studies examining Toronto reveals that workers’ responses to poorer work and social services usually manifest in labour-management relations that are handled short-sightedly with the aim of quickly stopping the strikes.
One recent example of such negotiations in municipal labour affairs is the 2009 example of City of Toronto vs. CUPE 416, representing garbage collection services’ employees. The City’s negotiators sought to threaten to unilaterally change the employees’ terms of employment in a bid to implement the final offer. The goal was to make a weaker offer to the union or lock them out from working if they don’t accept. This was a public relations strategy aimed at hurting the union in the eyes of the public. The goal was to take away public support from workers, who would appear greedy for not accepting different work conditions. Of course, the public was not aware of the specific terms that would be changed. The strike of garbage workers of 2009 demonstrates how labour is the primary target of neo-liberalism, enforced by the city (municipal level), where the workers are being punished by the economic and political climate on federal and provincial levels. As Randy Steinhauer argues that a strategy for the survival of neo-liberalism has been misdirection and diversion. Workers and unions are blamed for unclean streets of Toronto rather than pinpointing to the managerial incompetence and short-sighted corporate greed (Winter, Reitsma & Wilson 2012).
Since late 1980’s and early 1990’s the province of Ontario’s public sector had been under pressures to reduce costs, and alter the form of service and program delivery. Legislation that emphasize avoiding the strike is based on a belief that public employees could not be allowed to strike because of the harm that might be done to the public and because excessive union bargaining power would result in excessive wage gains in negotiations. This was the rationale for extensive intrusions into the collective bargaining process in the public sector. The result was the legislative patchwork of compulsory mediation, fact-finding and arbitration. Therefore, the new governing mechanisms with regard to the industrial relations took place within the then existing legislative framework that governed collective bargaining. Empirical evidence on the effectiveness of dispute resolution procedures shows that the compulsory arbitration had chilling or “narcotic effects “on the labour resolution outcomes. These results might be due to a three-year social contract for the entire public sector including municipalities, universities, schools, hospitals and the civil service imposed by the government in 1993. As authors claim, as a result, wages, benefits, and working conditions were legislated (i.e. controlled) and the right to strike was removed. For instance, evidence shows that “arbitration exerted a powerful influence over union bargaining behaviour by increasing rates of impasse. This finding is supportive of a dependency effect whereby a union’s high usage of arbitration fosters an inability to freely negotiate settlements” (Hebdon & Dachis, 2010).
Case Study: The Federal Government and the Canada Post 2018 Strike
On November 15th 2018, Canada has experienced the biggest backlog of deliveries in history. Over 400 tractor-trailers at the Toronto processing plant sit full, as well as hundreds more in Vancouver and Montreal. Every truck filled to the brim with roughly 2500 parcels each. With a backlog of this magnitude, the pressure is on holiday shoppers and shippers to find other ways to transport their products and purchases. Furthermore, if the backlog isn’t cleared soon, the Christmas and Boxing Day sales will suffer and reduce consumer spending. Furthermore, Canada Post has asked international partners to stop sending mail and parcels to Canada. 80 to 90% of sellers on EBay use Canada Post to ship their parcels. This puts a great toll on smaller, independent e-commerce businesses, as larger companies have the resources to change shipping companies. Ultimately, the threat of damage to the economy is clear.
The timing of the labour dispute couldn’t be worse. However, just one day before one of the busiest shopping days in Canada, Ottawa has intervening in the five-week old Canada Post strike. The Federal government has tabled back to work legislation, which is aimed at forcing workers back to their stations. The resulting state of collective bargaining is unchanged, with both parties still not finding a middle ground. Unfortunately, the threat of damaged public relations is high, as the public feels severely sabotaged.
What is at the heart of the dispute? The union represents 50,000 postal workers, who have been without a contract for about a year. Up until a few weeks the workers went on a rotating strike. They are asking for a 2.9% annual wage increase, to which Canada Post counter offered with 2%. The union also introduced the issue of an injury crisis, citing 25% of workers injured last year. The company proposed a $10 million-dollar safety fund, which the union dismissed, citing that it would do nothing to solve the issue. Finally, the union wants a ban on forced overtime. Canada post is offering overtime. The union claims that tabling back to work legislation is a violation of its constitutional rights. The final and huge issue for CUPW is the perceived overuse of temporary workers. The union wants Canada Post to provide greater job security through the creation of more full-time positions, arguing that temporary workers are consistently paid less, are not covered by health, dental and sick or disability insurance plans, have no guaranteed hours and cannot plan their futures.
Several levels of specialized mediators have been appointed for the process. The workers were allotted a month’s time for negotiations without the threat for back to work legislation. After 37 days, they were forced back to work. Therefore, a resolution has not been made yet. Instead, the government introduced a bill simply to stem economic damage that would be caused by a hindrance in public services.
The resolution is not met for two key reasons, which are to be discussed in the following section: 1) a lack of an advanced legal structure to foresee and mitigate extreme negotiation situations and 2) the financial situation of the Crown corporation does not allow it to meet worker demands due to poor management. Simply put, the workers have fair demands, though it seems that Canada Post is way too inefficient of a business to meet them without losing even more money.
Recommendations
The Canadian Constitution Act of 1867 gave the provinces a central role in social policy, with specific sections granting them authority over education, health, and related charitable institutions. Over time, the courts extended the provincial role granting them powers over property, civil rights and matters of a local or private nature. Most intriguingly, despite the centrality of provincial jurisdiction, the federal government also has a significant presence in social policy. Amendments to the Constitution gave federal authorities full jurisdiction over unemployment insurance and substantial jurisdiction over contributory pensions. Likewise, federal tax powers also constitute a powerful tool of social redistribution. However, the essence of the federal role has been implicit rather than explicit in the Constitution. According to constitutional doctrine, ‘the federal Parliament may spend or lend its funds to any government or institution or individual it chooses, for any purpose it chooses; and it may attach to any grant or loan any conditions it chooses, including conditions it could not directly legislate’ (Hogg 2001). This convention, known as the doctrine of the spending power, has been challenged both politically and judicially.
Conclusion
Canada has an extensive history of development of labour policy and maintenance of structured industrial relations. Throughout the growth of industries over the last 150 years, there has been a continuous effort to protect worker rights and fight for the balance between the employer and the employee. However, this study points to recent shortcomings in labour relations and the processes behind collective bargaining. With a particular focus on the public sector, this study argued that the government should further calibrate policy to adjust for the reoccurring case of public sector strikes and back-to-work legislation.
In particular, the Constitution of Canada does not require the Federal government intervene on any issue that isn’t related to trade and commerce. Furthermore, it is the duty of the Provincial governments to tend to property rights, civil rights as well as labour relations. Therefore, any labour relations issue an essential duty of the provincial government. Provincial laws manage the conflicts in a way that is best suited to each province.
Therefore, exclusive responsibility for labour relations are allocated to the provinces by judicial interpretation.
A case study analysis looked at the example of a strike that was managed by a provincial government and another example of a strike that required federal government intervention. A discussion combining these studies allows one to see how the federal government interference can trigger the issue of unconstitutional back-to-work legislation in the wake of sweeping federal influence, while the duty of such legislation falls to the provinces.
Furthermore, the study offered a glimpse how strikes by public employees that provide essential services may disrupt regular services. It has been argued that the long-term outcomes might offset any temporary loss of services. However, although the management structures within labour unionism can mitigate outcomes, data shows that the recent trend toward the “back-to-work“ coercive measures reduces the incentive for employees, prolonging duration of strikes. Ultimately, labour policy should reconsider legislation that bans strikes because, as empirical data demonstrates, such legislation increases both the length and likelihood of strikes.
Finally, it is up to policymakers to determine whether the unintended and long-term consequences of the legislation they propose are worth the benefits they seek. In conclusion, it has been argued that Canadian provincial governments can reduce their labour costs by reducing their reliance on compulsory arbitration, and by avoiding any form of coercive measures/processes of control.
In conclusion, it is up to the federal government to determine if there are negative externalities and unintended consequences of back-to-work legislation applied towards different provinces.
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